Seagate profit surges on tax benefit, rising sales

SAN FRANCISCO (MarketWatch) -- Seagate Technology on Thursday reported a huge rise in fourth-quarter profit that was helped by increased disk-drive sales and a large tax break.

Seagate
STX, -0.19%
said it earned $541 million, or 96 cents a share, on $2.74 billion in revenue, compared with earnings of $7 million, or a penny a share, on revenue of $2.53 billion in the same period a year ago.

The Scotts Valley, Calif.-based company said results were helped by a benefit of $359 million that was a favorable adjustment to a valuation allowance related to Seagate's deferred tax assets.

Excluding one-time items, Seagate said it would have earned $568 million, or $1.01 a share. Analysts surveyed by Thomson Financial had forecast Seagate to earn 36 cents a share on $2.69 billion in sales.

Seagate, the world's No. 1 maker of hard-disk drives, said it shipped 39.2 million hard-disk drives during the quarter.

For its fiscal first-quarter, Seagate estimates it will earn between 35 cents and 39 cents a share on revenue in a range of $2.9 billion to $3 billion. Seagate said that excluding $27 million in charges related to recent acquisitions, it would earn between 40 cents and 44 cents a share.

Analysts had previously forecast Seagate to earn 45 cents a share on $2.88 billion in revenue for its first quarter.

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